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With a $16 billion deficit this year, the treasurer is expected to announce spending cuts in many areas that could result in public-sector job losses.

Finance Minister Dwight Duncan said he didn't agree with all of economist Don Drummond's cost-cutting recommendations. (CHRIS YOUNG / THE CANADIAN PRESS)

By Robert BenzieQueen's Park Bureau Chief

Thu., March 15, 2012

Ontario will cancel or delay billions of dollars in planned infrastructure spending in the March 27 budget to save “hundreds of millions in interest costs,” says Finance Minister Dwight Duncan.

A grim-faced Duncan said Thursday that his spending plan would be the “most significant” since Premier Dalton McGuinty’s Liberals were first elected in 2003.

While the treasurer said $8.4 billion in TTC expansion funding is not on the chopping block, he declined to say what is.

“There will be significant reductions in infrastructure spending in the coming years, which will save us hundreds of millions in interest costs over time,” he told reporters at Queen’s Park.

“They will not affect the Toronto Transit Commission or public transit here in Toronto.”

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Nor will the $33 billion modernization of Ontario’s fleet of nuclear reactors be slowed, added Duncan.

Transit projects in Kitchener-Waterloo and Ottawa will also be spared.

The savings will come from major cuts to a three-year $35 billion spending program announced in last year’s budget that Transportation and Infrastructure Minister Bob Chiarelli was touting as recently as November, just weeks after the Liberals were re-elected.

With $12.8 billion spent on infrastructure this year, any cuts would come from the remaining $22.2 billion.

According to the 2011 budget, that program was “expected to create and preserve over 300,000 jobs,” so any impact on employment is unclear.

But Duncan — who presided over Ontario Lottery and Gaming Corporation’s closure of unprofitable slot operations at racetracks in Fort Erie, Sarnia and Windsor on Wednesday, eliminating 560 jobs — warned of tough days ahead.

“Fifty-five cents of every dollar we spend is on wages and benefits and there are difficult aspects to this,” he said.

On Monday, OLG announced a major expansion of gambling in the province to bring in an additional $1 billion a year to the treasury. Aside from shuttering the three slots facilities, the agency plans privatization, a new casino in the Greater Toronto Area and online gaming to boost profits.

Duncan said Thursday he would not increase taxes, though some business fees will be raised, including processing charges that haven’t increased in 25 years.

He refused to confirm that a planned reduction of corporate taxes from 11.5 per cent to 10 per cent by July 2013 is on hold.

“After almost a decade of Dalton McGuinty’s spending, Ontarians are now staring a $30 billion deficit in the face. As we speak, the Liberals are spending $1.8 million more each hour than the province takes in through revenue,” Elliott said Thursday.

NDP MPP Jagmeet Singh (Bramalea-Gore-Malton), whose party has been more open to working with the Grits, said it’s too early to say if New Democrats will support the budget.

“We want to make sure it puts the concerns of Ontarians first. We want affordability for families … we also know that jobs are a big concern for people,” said Singh.

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